The following Amendment No. 6 to the Atlantic Richfield Special
Terminiation Allowance Plan contains the current change of control
provisions applicable to the Company's executive management team,
including its five most highly compensated executed officers.
AMENDMENT NO. 6
TO
ATLANTIC RICHFIELD
SPECIAL TERMINATION ALLOWANCE PLAN
_____________________________
Pursuant to the power of amendment reserved therein, the Atlantic
Richfield Special Termination Allowance Plan (the "Plan") is
hereby amended effective as of July 28, 1997.
1. Section 3, Paragraphs 3.15, 3.19 and 3.20 of the Plan are
amended to read as follows:
"3.15 "Anticipatory Change of Control" means (a)
the execution of an agreement or a written document
which, if the subject thereof were consummated, would
result in a Change of Control; (b) a public
announcement by any Person, including ARCO, of an
intent to take an action(s) which, if consummated,
would result in a Change of Control; or (c) the
delivery of a signed, written statement to the Trustee
of the Change of Control Trust and ARCO's Independent
Auditor by the Chief Financial Officer of ARCO and
General Counsel of ARCO that an Anticipatory Change of
Control is in effect, provided that, with respect to
any of the above three circumstances, the Anticipatory
Change of Control shall not be effective until approved
by either the Board or the Executive Committee of the
Board."
"3.19 "Change of Control Trust" means the trust
established by ARCO to provide for the payment of any
benefits, in whatever form is required, under this Plan
on and after a Change of Control."
"3.20 "Special Plan Administrator" means the entity
designated in the Change of Control Trust, which shall
have full administrative powers under this Plan on and
after a Change of Control, including, but not limited
to, all interpretive and decision powers reserved to
the Administrator prior to a Change of Control."
2. Section 3, Paragraph 3.21 of the Plan is deleted and
Paragraph 3.22 is renumbered as Paragraph 3.21. New Paragraphs
3.22, 3.23 and 3.24 are added to the Plan to read as follows:
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"3.22 "Board" means the Board of Directors of ARCO
established by the Articles of Incorporation of ARCO.
3.23 "Executive Committee" means the Executive Committee of
the Board as established by the Board of Directors of
ARCO.
3.24 "Severance Plan" means the Special Termination
Allowance Plan, Enhanced Retirement Plan (i.e., an
improvement over the basic retirement allowance
applicable for a limited period of time such as the
"5+5" Enhanced Retirement Plan benefit under the
Atlantic Richfield Retirement Plan II effective October
2, 1998) and/or such other severance plan generally
applicable to Employees involuntarily terminated by the
Company, as such plan or plans may be in effect on the
date immediately preceding a Change of Control."
3. Section 6 of the Plan is amended to read as follows:
"SECTION 6
ALLOWANCES PAYABLE FOLLOWING A CHANGE OF CONTROL
6.1 Notwithstanding any other provision of the Plan,
if an Employee is terminated from employment under any
of the circumstances described under Paragraph 6.2,
during the Benefit Trigger Window, the Employee will be
paid a single cash allowance as described in Paragraph
6.3, as soon as possible following such termination.
6.2 Notwithstanding any other provision of this Plan,
Termination of Employment shall mean termination of
employment, other than due to voluntary termination or
for cause, during the Benefit Trigger Window and shall
include such additional circumstances of termination as
described in footnote 4 of Paragraph 6.3.
6.3 Following Termination of Employment of a Participant, as
described in Paragraph 6.2, a cash payment, as chosen by the
Participant, shall be made as prescribed under the following
payment schedule:
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PARTICIPANT CHOICES:
(1) Multiple of Covered
EMPLOYEE Compensation (F1); or CONSTRUCTIVE
GRADE (2) Severance Plan (F2) TERMINATION (F3)
-------- ------------------------ ----------------
EO & E1 3 x CC or Severance Yes
E2 3 x CC or Severance Yes
E3 2 x CC or Severance Yes
E4 1-1/2 x CC or Severance Limited
10 & 9 1 x CC or Severance Limited
8 & below 1/2 x CC or Severance Limited
6.4 Special Tax Allowance
(a) A special cash allowance shall be paid to each
Employee in Grades E0, E1, E2 and E3 as soon as
possible following the end of the Benefit Trigger
Window in an amount equal to any excise tax which
has been assessed (or, in the sole discretion of
the Special Plan Administrator will be assessed)
against the Employee under 4999 ("Golden
Parachute Payments") of the Internal Revenue Code
(the "Code").
(b) As to all Employees Grade E4 or below,
the Special Plan Administrator shall, in its sole
discretion, review the value of all benefits paid
and which may become payable to a Participant from
time-to-time and determine whether (i) the total
amount should be frozen at the amount which
constitutes a "Parachute Payment" under
2806(b)(2) of the Code, and if so, the allocation
of payments to achieve such result or (ii) the
total amount should be continued to be paid to the
Participant pursuant to plan provisions without
regard to the application of 2806 and 4999 of
the Code. If the amount under Subparagraph (i)
exceeds the amount paid under Subparagraph (ii)
after assessment of any applicable taxes
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(F1) Covered Compensation ("CC") is the amount equal to the sum of (a)
annualized Pay and the average of any lump sum merit adjustments
of Pay for each of the prior 3 years, plus (b) either (i) the
average of the non-Atlantic Richfield Annual Incentive Plan (AIP)
bonus for each of the prior 3 years, or (ii) the greater of the
AIP Award for each of the prior 3 years or the current year Target
AIP Award (as defined in the AIP).
(F2) Severance Plan ("Severance") means the Severance Plan as defined
in Section 3.22 of this Plan.
(F3) Constructive termination means an Employee's election to terminate
following management's request to (a) accept a demotion to a lesser
job, (b) accept a reduction in Pay plus the Target AIP Award (as
defined in the AIP) by 10% or more, or (c) accept a new principal
place of work which would qualify for deduction of moving expenses
under Section 217 of Internal Revenue Code. For all Employees below
Grade E3, constructive termination is limited as follows: Only
provisions (b) and (c) apply and for Employees Grade 8 or below,
provision (b) shall apply only to Pay.
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under Section 4999 of the Code, the excess amount
shall be paid to the Participant as soon as
possible following such determination by the
Special Plan Administrator."
4. Section 9, Paragraph 9.3(a) of the Plan is amended to read as follows:
"9.3 (a) During an Anticipatory Change of Control
the Plan may not be amended, except to the extent
required to comply with legal requirements, upon
advice of Counsel, and in any event, such
amendment may be adopted only by the Board. Any
such amendment during a period of an Anticipatory
Change of Control which reduces benefits or
otherwise adversely affects the payment of
benefits to which an Employee would otherwise be
eligible or would have been eligible upon
termination of employment following a Change of
Control, as determined in the sole discretion of
the Special Plan Administrator, shall provide
substantially equivalent value in replacement
thereof to the Participant."
Executed this 5th day of November, 1998.
ATTEST ATLANTIC RICHFIELD COMPANY
/s/ ARMINEH SIMONIAN /s/ JOHN H. KELLY
BY: ______________________ BY: ____________________________
JOHN H. KELLY
Senior Vice President
Human Resources
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